order to reduce her agency costs. Whenever this incentive effect dominates the well-known direct synergy effect, synergies … actually reduce consumer surplus which opposes the use of an efficiency defense in merger control. …

to the merger. We show that a PPO reduces the minimal synergy level necessary to make a merger beneficial for consumers …. It follows that an antitrust authority ignoring existing PPOs when evaluating merger proposals (which reflects the … current EU merger control regime) invites sneaky takeovers: Acquiring firms strategically use PPOs prior to a full merger …

acquirer firm to learn the merger synergies with the target firm in advance. The realization of a synergy is uncertain ex ante … initial minority share, becomes an insider, and learns the merger synergy. We show how this feature of PPOs affects a firm …'s takeover strategy and the decision problem of the antitrust authority. We derive implications for a merger control approach to …